South Korea's Democratic Party Launches Digital Asset Committee for Crypto Regulation

South Korea’s Democratic Party has launched a Digital Asset Committee, marking a significant step towards establishing a comprehensive regulatory framework for the cryptocurrency industry. The committee, which held its inaugural meeting on May 13, 2025, at the National Assembly, aims to address regulatory gaps and promote industry growth as the country prepares for upcoming elections.

The committee's primary objectives include formulating policies for the cryptocurrency business, with a particular focus on stablecoins and market modernization. Major cryptocurrency exchanges such as Upbit, Bithumb, and Coinbit participated in the discussions, indicating strong industry support for the initiative.

The Digital Asset Committee is structured into two sub-groups. The first sub-group is dedicated to developing policy and legal frameworks, aiming to set clear regulations for cryptocurrencies. The second sub-group focuses on industry innovation, exploring ways to foster the growth of blockchain technology and digital assets. A Democratic Party official emphasized the goal of creating a modern yet stable capital market, reflecting South Korea’s ambition to lead in blockchain and digital finance on a global scale.

One of the committee's key priorities is the regulation of stablecoins. The Bank of Korea has highlighted the importance of having licensing authority over won-based stablecoins to ensure financial security. A representative from the central bank stressed the need for stringent regulation of stablecoins linked to the national currency to mitigate potential risks.

The establishment of the Digital Asset Committee is seen as a response to the growing public interest in cryptocurrencies. With millions of people in South Korea actively trading digital assets, the country ranks high in cryptocurrency usage. However, the lack of clear regulations has raised concerns about fraud and market volatility, making the committee's work crucial for addressing these issues.

This initiative by the Democratic Party comes at a pivotal time, as the presidential elections approach. The committee's efforts will shape the next administration's strategy for digital assets, which could have significant implications for South Korea’s economy. Major exchanges have expressed satisfaction with the decision, with Upbit, South Korea’s largest crypto exchange, stating that it takes a positive approach to initiatives aimed at establishing a transparent regulatory environment. Bithumb and Coinbit also pledged their cooperation with policymakers.

Min Byeong-deok, known for his advocacy of technological innovation, chairs the committee. Under his leadership, the group plans to consult with industry experts, scholars, and international regulators to develop a balanced policy. South Korea’s desire to regulate cryptocurrencies aligns with global trends, as countries like the United States and Singapore have already established frameworks that balance innovation with consumer protection. South Korea aims to leverage its technological prowess to attract blockchain investments and shape global digital asset standards.

The establishment of the committee has sparked debates about South Korea’s role in the global crypto market. With its advanced tech infrastructure and active trading community, the country is well-positioned to influence digital asset standards worldwide. However, challenges remain, including the need to balance regulation with innovation and address concerns about financial crime.